How to Navigate the Coming Digital Transformation

The words “digital transformation” are on a lot of lips these days. This is the process in which the enterprise goes from selling products to selling services, where mobile apps replace web pages as the means to reach customers, and where providing “experiences” is as important, if not more so, than selling or marketing.

Naturally, this requires a radically different data infrastructure than what most enterprises have now. But more than that, it necessitates a top-to-bottom cultural change that affects the outlooks and job responsibilities of everyone from the lowly IT tech to the CEO.

“Agility is key, yet code is slow and there are too few skilled engineers to meet demand for extending legacy systems, connecting and using data from on-premise and cloud based systems or delivering customer facing apps.”

Indeed, these changes will affect more than just data infrastructure, says Falguni Desai, managing director of Future Asia Ventures. It will cut across numerous processes governing marketing, customer experience, workforce management, manufacturing, operations and a host of others. The holy grail, of course, is to convert today’s physical products with digital ones, which can then be developed, packaged, marketed and delivered at a fraction of the cost and complexity that organizations struggle to maintain today.

Think of digital information services vs. yesterday’s newspapers and magazines, or modern app-driven financial services rather than a long wait at the teller’s window. Even complex products like automobiles are increasingly being defined by software so that in the very near future things like engine size and horsepower will take a back seat (sorry) to advanced digital features in the eyes of the consumer.

This isn’t to say infrastructure is not an important element in digital transformation. In fact, it will become the linchpin to advanced development and customer fulfillment. The big question, though, is how to get there from here, and in that regard many of the top communications providers say they can help. NTT Com, for instance, recently enhanced its Enterprise Cloud offering with new private hosted features, multi-tenant capabilities and seamless support for hybrid clouds, all aimed at creating advanced infrastructure to support the shift to digital processes and products. The platform supports leading virtual environments like VMware and Hyper-V, as well as popular cloud services like OpenStack and AWS. The service is already up and running in Japan, with rollout to the rest of the world later this year.

Ultimately, though, the enterprise will have to build its own competencies in digital transformation, says John Schmidt, vice president of business transformation services at Informatica. To get started, recognize that the application-centric efforts you’ve made so far need to be supplemented by data-centric architectures as well. This involves establishing clear ownership rules for customer and product data, improving the quality of shared data, enhancing your ability to conduct predictive maintenance and provide self-service functionality, not to mention laying the groundwork for the exponential growth that will come from sensor-driving data and rich media like images and video. This is a big job, but it starts with defining a new information model, not just a data model, that establishes data entities, cardinality and other characteristics for next-generation digital processes.

Digital transformation will be a long journey, and the outcome is still uncertain outside of the broad lines of improved development and customer service. The cold, hard fact is that there is no template to build on, and at any moment a younger, more nimble competitor who is unencumbered by legacy infrastructure can swoop in and upend markets and business models with an advanced digital platform.

But since the alternative is to ignore the realities of the new economy, today’s enterprise has no choice but to move forward and hope that the mistakes made along the way are not fatal.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.

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I am currently working for a company that is undergoing a Digital Transformation, and I have to say that based on my experience, this article and the study it refers to is incredibly accurate. For example, the quote from Peter Robbins, and the 2nd to last paragraph. What these reference, is in-fact one of the immediate 'growing pains' and major hurdles faced by a company entering transformation. The breadth and depth of legacy systems is usually so ingrained in both the IT infrastructure and company culture, that seeing (let alone developing) a way out of it, and into a digital system (often cloud-based services) is daunting to say the least. For employees within the company and even within the IT division, seeing the value of this path is difficult, not to mention the interruption in workflow while transitioning and building new systems to deliver digital products. There is also a definite threat of, "a younger, more nimble competitor who is unencumbered by legacy infrastructure", and our industry is now playing 'catch-up' to try to match the agility a startup offers. Reply

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